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    "localId": "4526015",
    "label": "New Jersey Building Contractors Association, Newark, NJ, February 22, 1967",
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    "id": "4526015",
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    "title": "New Jersey Building Contractors Association, Newark, NJ, February 22, 1967",
    "citationUrl": "https://catalog.archives.gov/id/4526015",
    "collections": [
        "Gerald R. Ford Congressional Papers",
        "Speeches"
    ],
    "subjects": [
        "Economics",
        "Federal budget",
        "Great Society",
        "Inflation (Finance)",
        "Revenue sharing",
        "Taxation",
        "Vietnam War, 1961-1975"
    ],
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    "ocrText": "The original documents are located in Box D21, folder \"New Jersey Building Contractors\nAssociation, Newark, NJ, February 22, 1967\" of the Ford Congressional Papers: Press\nSecretary and Speech File at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. The Council donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box D21 of The Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library\nSPEECH BEFORE THE NEW JERSEY BUILDING CONTRACTORS, NEWARK, N.J.\nWED., FEB. 22, 1967\nLADIES AND GENTLEMEN:\nTONIGHT I AM INVITING YOU TO TOUR WITH ME THE PUZZLING\nCITY OF WASHINGTON, D. C.\nI CALL IT THE PUZZLING CITY NOT MERELY BECAUSE THE\nFRENCHMAN WHO LAID OUT ITS STREET PATTERN HAD 'A THING'\nABOUT TRAFFIC CIRCLES, WITH STREETS FANNING OUT LIKE SPOKES\nFROM THE HUB OF A WHEEL.\nWASHINGTON IS A PUZZLING CITY BECAUSE IT IS A CITY OF\nGAPS, A CITY HERE THE GAP BETWEEN DREAMS AND REALITY IS\nMOST ACUTE, A CITY WHERE THE GAP BETWEEN RHETORIC AND REAL ITY\nOFTEN IS MOST PAINFUL, A CITY WHERE ILLUSION OFTEN PASSES\nLIBRARY\nFOR TRUTH.\n-2-\nAT NO TIME HAS THE CITY OF WASHINGTON BEEN MORE PUZZLING\npartically\nTHAN DURING THE PAST THREE YEARS\nAND AT PRESENT.\nIT HAS BEEN SO PUZZLING THAT EVEN THE MOST CASUAL\nOBSERVER OF CURRENT EVENTS IS FAMILIAR WITH THE TERM,\nCREDIBILITY GAP. MOST AMERICANS ASSOCIATE THAT TERM WITH\nTHE EQUALLY POPULAR EXPRESSION \"WOULD YOU BELIEVE?\"\nAND THEIR ANSWER IS \"NO.\"\nWITH THE PUBLICITY GENERATED BY THE ADAM CLAYTON POWELL,\nTHOMAS DODD AND BOBBY BAKER CASES, THE AMERICAN PUBLIC ALSO\nIS BEGINNING TO SEE AN INTEGRITY GAP IN WASHINGTON.\nUNFORTUNATELY, THEY TEND TO TAR ALL MEMBERS OF CONGRESS\nWITH THE SAME BRUSH. THIS IS TRAGIC BECAUSE I FIRMLY\nBELIEVE THE OVERWHELMING MAJORITY OF MEMBERS OF THE CONGRESS\n--DEMOCRATS AND REPUBLICANS--ARE HONEST, HARDWORKING AND\nIBRARY\nABLE PUBLIC OFFICIALS.\n-3-\nWHAT ALL OF THIS ADDS UP TO IS THAT IT'S CLEANUP TIME\nIN WASHINGTON. IT'S NOT FIXIT TIME; IT'S FIXUP TIME.\nWE HAVE TO CLEAN HOUSE - - AND THE SOONER THE BETTER.\nI'M NOT JUST TALKING ABOUT ABUSES OF THE PUBLIC TRUST;\nI'M TALKING ABOUT ABUSES OF THE PUBLIC PURSE.\nvery specifically\nI'M NOT JUST TALKING ABOUT AIRPLANE TRIPS ON PRIVATE\nBUSINESS AT TAXPAYER EXPENSE; I'M TALKING ABOUT FOOLISH\nFUNDING, SILLY SPENDING OF TAXPAYER MONEY IN THE NAME OF\nTHE PUBLIC INTEREST.\nI'M TALKING ABOUT MILLIONS OF DOLLARS SPENT ON SOCIAL\nEXPERIMENTATION WHILE THERE'S A WAR ON. I'M TALKING ABOUT\nMILLIONS OF DOLLARS SPENT ON BEAUTIFYING AMERICA WHILE THE\nNUMBER OF GI'S KILLED OR WOUNDED PASSES THE 50,000 MARK IN\nA WAR COSTING US NEARLY $2 BILLION A MONTH.\nGERALD\nLIBRARY\n-4-\nseveral\nLET ME GIVE YOU COUPLE OF EXAMPLES:\nI HEARD THE OTHER DAY ABOUT A HALF-MILLION-DOLLAR\nHEALTH-EDUCATION-WELFARE DEPARTMENT PROJECT TO DEVELOP\nA DANCE AND THEATER CURRICULUM. SO I CHECKED INTO IT.\nA U. S. OFFICE OF EDUCATION OFFICIAL TOLD ME THE $500,000\nIS BEING SPENT THIS FISCAL YEAR UNDER TITLES 3 AND 4 OF THE\nELEMENTARY-SECONDARY EDUCATION ACT. THAT'S FEDERAL AID TO\nELEMENTARY SCHOOLS AND HIGH SCHOOLS under registation approved for\nthe first time in 1965 under The late, unlamented 89th Engreos,\nTHE MONEY HAS BEEN USED TO ESTABLISH LABORATORY THEATERS\nIN PROVIDENCE, R.I., AND NEW ORLEANS, LA. THE IDEA IS\nTO FIND OUT HOW WE MIGHT BE ABLE TO USE THE ARTS TO TEACH\nYOUNGSTERS WHO CAN'T LEARN FROM BOOKS.\nAS THE OFFICE OF EDUCATION OFFICIAL EXPLAINED IT,\nFORD LIBRARA\n\"WE'RE TRYING TO SEE WHAT THE ARTS CAN DO TO MEET NATIONAL\nNEEDS.\"\n-5-\nCAN YOU SEE SPENDING HALF A MILLION DOLLARS IN EDUCATIONAL\nTHEATER WORKSHOPS WHILE THERE'S A WAR ON? I CAN'T, HOWEVER\nor academically\nLOFTILY IT IS DESCRIBED.\nsuch expendentures do not\nIT DOESN'T MAKE SENSE WHEN WE SHOULD BE SETTING PRIORITIES\nAND CUTTING OUT ALL BUT THE MOST ESSENTIAL DOMESTIC SPENDING.\n?\nbreat Society\nisdescribedas\nI LEARNED, TOO, ABOUT ANOTHER/PROJECT THAT SHOULD BE\nMOST HELP\nTHIS NATION\nMEET\nITS NATIONAL NEEDS.\nTHE HOUSING AND URBAN DEVELOPMENT DEPARTMENT HAS JUST\nAPPROVED A $452,375 GRANT TO THE DISTRICT OF COLUMBIA FOR\nA NUMBER OF BEAUTIFICATION PROJECTS. INCLUDING THIS\n$452, 000 GRANT, THE D. C. GOVERNMENT PLANS TO SPEND MORE\nTHAN $2 MILLION ON BEAUTIFICATION THIS FISCAL YEAR.\nGENERAL FORD VIBRARY\nIDEALLY, BEAUTY SHOULD BE PRESENT IN EVERYONE'S LIFE.\nIDEALLY, THE CITY OF WASHINGTON SHOULD BE THE MOST BEAUTIFUL\n-6-\nCITY IN THE WORLD. BUT DOES IT MAKE SENSE TO DROP A $452,000\nfederal BEAUTIFICATION GRANT INTO THE LAP OF D. C. OFFICIALS WHEN\nWE'RE FIGHTING A COSTLY WAR HALFWAY AROUND THE WORLD? I\nTHINK NOT.\nSPENDING AND THEN TELL ME WHETHER THE PRESIDENT HAS BEEN alequelly\nTHINK ABOUT THESE TWO EXAMPLES OF JOHNSON ADMINISTRATION\nBLOCKING UNNECESSARY EXPENDITURES AS HE LIKES TO PRETEND\nonly peopless -\nCONSIDER THESE TWO ITEMS AND TELL ME WHETHER YOU THINK\nCONGRESS SHOULD GIVE THE PRESIDENT HIS INCOME TAX INCREASE\nOR CUT HIS FISCAL 1968 BUDGET. YOU AND I BOTH KNOW THERE\nARE MANY MORE ITEMS LIKE THESE TWO SCATTERED THROUGHOUT\nTHE MAMMOTH DOCUMENT THAT PASSES FOR A GUIDE TO REASONABLE\nFEDERAL SPENDING.\nBERALD FORD LIBRARY\nTHE PRESIDENT'S $135 BILLION FISCAL 1968 BUDGET NOT ONLY\n-7-\nIS FAT.\n(HERE HOLD UP THE BUDGET\nBUT IT HAS PLENTY OF FAT IN IT.\nWE IN THE CONGRESS WHO\nCARE ABOUT THE TAXPAYER INTEND TO CUT OUT AS MUCH OF IT\nAS WE CAN. WE KNOW WE CAN DO IT WITHOUT CUTTING NECESSARY\nThe budget surget\nSERVICES. WE KNOW THE PEOPLE WANT # DONE either with a scalpel n\n1\na meat are,\nIS THIS A NEGATIVE ATTITUDE? IS IT NEGATIVE TO_WANT\nTO STREAMLINE THE FEDERAL GOVERNMENT, SET PRIORITIES AND\nSPEND THE TAXPAYER'S DOLLARS PRUDENTLY? I CONTEND THAT sucha\nIS BEING POSITIVE--AND IN THE BEST POSSIBLE WAY. THOSE\npolicy\nWHO RAISE THEIR HANDS IN HORROR OVER ANY ATTEMPTS AT\nBUDGET-CUTTING SHOULD BE CONSIGNED TO CREDIBILITY GAP,\nOR BETTER YET LET'S DROP THEM INTO CREDIBILITY CANYON.\nTHE CREDIBILITY GAP HAS WIDENED INTO A CANYON, YOU KNOW\nAND FOR GOOD REASON.\nFORD NEBRARY\n-8-\nA SHORT TIME AGO DEFENSE DEPARTMENT OFFICIALS ADMITTED\nTHAT OUR PLANE LOSSES IN VIETNAM ARE ACTUALLY DOUBLE WHAT\nTHEY HAD BEEN REPORTING\nBECAUSE THEY HAD BEEN GIVING OUT\nFIGURES ONLY ON THOSE PLANES LOST IN AIR ACTION IGNORING,\nAS FAR AS THE PUBLIC WAS CONCERNED, THOSE DESTROYED OTHER\nTHAN IN COMBAT. THERE'S ACCURACY FOR YOU; THERE'S\nTRUTH-IN-REPORTING FOR YOU!\nTHE CREDIBILITY GAP NOT ONLY EXTENDS TO THE BUDGET;\nIT'S this gap THERE between THAT factor IT IS and THE fection WIDEST. is The widest at this print, department in This area, in this\nasan epample\nTAKE THE PRESIDENT'S BUDGET FOR THE CURRENT FISCAL YEAR,\nFOR INSTANCE. WHEN THE PRESIDENT SUBMITTED IT TO CONGRESS,\nHE SAID WE'D HAVE A $1.8 BILLION DEFICIT. REPUBLICANS SAID\nTHE FIGURE WAS A PHONEY. THE ADMINISTRATION CRIED, \"POLITICS.\"\nthis same\nNOW THE PRESIDENT TELLS US THE 1967 DEFICIT WILL BE MORE\nLIBRARY\n-9-\nmene\nTHAN $9 BILLION. THIS ERROR RESULTED FROM A, MISCALCULATION\nOF $14 BILLION IN EXPENDITURES, AND THIS GROSS UNDERESTIMATE\nOF EXPENDITURES WAS NOT ALL RELATED TO INCREASED COSTS\nIN VIETNAM.\nwe\nALL LAST YEAR REPUBLICANS SAID THE ADMINISTRATION WAS\nHANDING OUT FAKE FIGURES ON THE COST OF THE VIETNAM WAR.\nCIVILIAN SPOKESMEN FOR THE PENTAGON SNORTED, \"POLITICS.\"\nNOW DEFENSE SECRETARY MCNAMARA ADMITS HE UNDERESTIMATED\nTHE COST OF THE WAR BY $10 BILLION.\nAT THE SAME TIME THAT ADMINISTRATION OFFICIALS WERE\nREFUSING TO MAKE KNOWN THE TRUE COST OF THE VIETNAM WAR,\nTHEY WERE RAMMING THROUGH CONGRESS SUCH NEW PROGRAMS AS\nRENT SUBSIDIES, THE TEACHER CORPS AND MANY OTHER GREAT\nSOCIETY FRINGE BENEFITS.\nFORD LIBRARY\n-10-\nALL THIS TIME PRICES WERE MOVING UP AND THE PRICE\nSTABILITY THAT HAD MEANT REAL ECONOMIC GAINS FOR MILLIONS\nOF AMERICANS WAS BEING DESTROYED.\nPRESIDENT JOHNSON REJECTED THE RECOMMENDATION OF HIS\nTOP ECONOMIC ADVISER, GARDNER ACKLEY, THAT HE ASK CONGRESS\nTO VOTE AN INCOME TAX INCREASE. IN THE ALTERNATIVE, HE\nALSO REJECTED ALL REPUBLICAN PLEAS THAT HE MAKE DEEP CUTS\nIN DOMESTIC SPENDING AS OFFSETS TO VIETNAM WAR COSTS.\ninevitable\nTHE RESULT WAS THAT OUR OVERHEATED ECONOMY ROLLED\nBLINDLY ON, STIMULATED BY HEAVY GREAT SOCIETY SPENDING\nAND SLOWED DOWN ONLY SLIGHTLY BY SUCH DEVICES AS ACCELERATED\nCOLLECTION OF INCOME TAXES AND RESTORATION OF PART OF THE\nGRD\nEXCISE TAXES REPEALED IN 1965.\nOF COURSE, WE HAD TO INCREASE THE NATIONAL DEBT LIMIT\n-11-\nFROM $330 BILLION TO $336 BILLION RECENTLY. AND CONGRESS\nWILL BE ASKED TO RAISE THE DEBT LIMIT AGAIN IN JUNE BY\nABOUT $10 BILLION MORE. IS THIS ONLY BECAUSE OF THE\nVIETNAM WAR? NOT AT ALL! WE CAN ALSO THANK UNPRECEDENTED\nDOMESTIC SPENDING TO EXPAND THE SO-CALLED GREAT SOCIETY\nAND TACKLE MORE COSTLY SOCIAL EXPERIMENTS.\nIS THIS TRULY THE WAY TO FASHION A GREAT SOCIETY IN\nAMERICA? TO LADLE OUT MILLIONS OF TAXPAYER DOLLARS FOR\nCOUNTLESS EXPERIMENTS OF DUBIOUS VALUE WHILE OVER 400,000\nAMERICAN MILITARY PERSONNEL COMMITTED TO VIETNAM BY THE\nCOMMANDER-IN-CHIEF ARE ENGAGED IN THE THIRD LARGEST WAR\nIN OUR HISTORY?\nFORD & LIBRARY GERALD\nWE WANT PROGRESS IN THIS COUNTRY, BUT THIS ISN'T THE\nbasic\ndead\nWAY TO GET IT. THE 7 APPROACH IS WRONG. IT'S, WRONG BECAUSE\nIT'S BASED ON THE ASSUMPTION THAT ALL YOU HAVE TO DO IS\n-12-\nTHROW ENOUGH FEDERAL DOLLARS AT A PROBLEM AND IT WILL GO\nAWAY. IT'S WRONG BECAUSE IT'S BASED ON THE PREMISE THAT\nONLY WASHINGTON HAS THE ANSWERS.\nWE WOULD COME UP WITH MORE OF THE ANSWERS AND WE WOULD\nMOVE FASTER AND FARTHER IF WE HAD CONFIDENCE IN OUR STATE\nAND LOCAL GOVERNMENTS AND IN PRIVATE ENTERPRISE. IT IS A\nfatal MISTAKE TO LOOK EVERLASTINGLY TO THE FEDERAL GOVERNMENT.\nI HAVE CALLED WASHINGTON A PUZZLING CITY. LET ME TELL\nwell intentroned, dedicated\nYOU, IT IS ESPECIALLY PUZZLING TO THE 1 CITY OFFICIALS WHO\nTRY TO FIND THEIR WAY THROUGH THE MAZE OF FEDERAL BUREAUS\nTO TRACK DOWN A FEDERAL GRANT FOR A LOCAL PROJECT.\nTHE TRADITIONAL FEDERAL GRANT-IN-AID SYSTEM IS WASTEFUL.\nIT IS WASTEFUL OF TIME, MONEY AND HUMAN RESOURCES. AND\nIT MAKES OUR STATE AND CITY GOVERNMENTS MERE APPENDAGES\nGERALO, FORD LIBRARY\n-13-\nOF WASHINGTON, JIGGLED BY STRINGS PULLED IN THE NATION'S\nCAPITAL.\nI PREDICT THAT CONGRESS IN TIME WILL ADOPT A FEDERAL\nTAX-SHARING SYSTEM WHICH ULTIMATELY WILL REPLACE THE\nBOGGED-DOWN BUREAUCRATIC GRANT-IN-AID SYSTEM. AND LAY DOWN form\nFederal tor sharing no a systitute\nthe net expistry\nA CHALLENGE TO OUR STATE AND LOCAL GOVERNMENTS TO DO A JOB\n\"p\nwill\nIN SOLVING THEIR PROBLEMS.\nAS FEDERAL GRANT PROGRAMS EXPAND AND INCREASE IN NUMBER,\nTHE FEDERAL TAX LOAD GROWS GREATER AND THE RED INK RISES\nHIGHER. The years ago grant in and programs were to billing - this year\nB/5 billion. 2n his new budget the President wants 42. lither more or #17 billin.\nWE SHOULD BE MANAGING OUR NATIONAL AFFAIRS IN SUCH A\nWAY THAT INCOME TAXES COULD BE REDUCED. TAX REDUCTION\nSHOULD BE OUR GOAL. INSTEAD WE HAVE THE PRESIDENT ASKING\nFOR AN INCREASE IN INCOME TAXES TO PAY FOR INCREASED\n-14-\nDOMESTIC SPENDING. IT WOULD MAKE FAR MORE SENSE TO CUT\nDOMESTIC SPENDING BY AN EQUIVALENT AMOUNT.\nNOW WE HAVE MR. ACKLEY, CHAIRMAN OF THE PRESIDENT'S\nCOUNCIL OF ECONOMIC ADVISERS, ATTEMPTING TO BLACKMAIL\nCONGRESS INTO APPROVING THE PRESIDENT'S PROPOSAL FOR A\n5 PERCENT SURTAX. IF THE TAX INCREASE IS NOT APPROVED,\nMR. ACKLEY SAID THE OTHER DAY, \"WE MIGHT FACE THE DANGER\nOF A RETURN TO THE INFLATIONARY DANGERS AND HIGH INTEREST\nRATES OF LAST YEAR.\"\nMY ANSWER TO THAT IS THAT THE TAX INCREASE WILL NOT\nPREVENT THE UNIONS FROM SEEKING WAGE INCREASES OF 5 PERCENT\nOR MORE THIS YEAR. THE OUTLOOK IS FOR CONSIDERABLE COST-\nPUSH INFLATION DUE TO WAGE INCREASES REGARDLESS OF WHAT F OWE\nDO ON TAXES. AS FOR HIGH INTEREST RATES, THE ADMINISTRATION\n-15-\nCOULD HELP THAT SITUATION BY GETTING OUT OF THE SHORT-TERM\nMONEY MARKET FOR AS LONG AS POSSIBLE. Republicans a few weeks ago\noffered a solution but were defeated by a missure administration effort\nYOU AND I KNOW IT WAS TIGHT MONEY AND HIGH INTEREST\nRATES THAT PRODUCED A VIRTUAL DEPRESSION IN THE HOME\nBUILDING INDUSTRY LAST YEAR. YOU AND I KNOW THE ADMINISTRA-\nTION MOVED TO SUSPEND THE 7 PERCENT TAX CREDIT FOR INVESTMENT\nIN NEW PLANT AND BUILDINGS BECAUSE THAT WAS ONE WAY TO\nATTACK INFLATION WITHOUT GETTING ANYBODY BUT BUSINESS MAD.\nTIGHT MONEY? HIGH INTEREST RATES? THE HARD FACTS ARE\nTHAT GOVERNMENT SPENDING HAS BEEN AND CONTINUES TO BE A\nMAJOR REASON FOR THE RECORD DEMAND FOR MONEY AND FOR THE\nINFLATIONARY PRESSURES THAT PLAGUE OUR ECONOMY. AND THIS\nIS NOT JUST BECAUSE OF THE VIETNAM WAR. THE RECORD SHOWS\nTHAT NONDEFENSE SPENDING HAS BEEN RISING NEARLY AS MUCH.\nLIBRARY\nIn the last Air years mon difense spending has misen both in than % mitting of dollars more\n-16-\nWE SHOULD BE PROMOTING GROWTH IN THE ECONOMY--HEALTHY\nGROWTH. TO DO THAT WE MUST ACHIEVE A BALANCED FISCAL AND\nMONETARY POLICY. AS A FIRST STEP TOWARD FISCAL BALANCE,\nWE MUST PUT A HOLD ON ALL NEW FEDERAL PROGRAMS UNTIL CURRENT\nINFLATIONARY PRESSURES EASE OFF.\nIT IS A SEEMING PARADOX, BUT WE ARE ENCOUNTERING RECESSION\nDANGERS EVEN WHILE INFLATIONARY PRESSURES CONTINUE. THIS\nIS BECAUSE THE ADMINISTRATION HAS DONE SUCH A POOR JOB OF\nMANAGING THE ECONOMY EVER SINCE THE MASSIVE TAX CUTS OF\n1964 AND 1965 TOUCHED OFF STRONG ECONOMIC GROWTH. THERE\nIS DRAG AND SAG IN THE ECONOMY RIGHT NOW. WE NEED SOUND\nNEW ECONOMIC GROWTH. I DON'T THINK. A FEDERAL INCOME TAX\nnot\nINCREASE AT MID-YEAR IS, THE WAY TO ENCOURAGE IT. WHAT\nWE NEED IS A HOLDDOWN ON FEDERAL SPENDING AS A COUNTER\nTO INFLATION AND HIGH INTEREST RATES--AND RESTORATION\n-17-\nOF THE INVESTMENT TAX CREDIT TO SPUR CAPITAL INVESTMENT,\nGENERATE NEW BUSINESS CONFIDENCE AND PUT MORE PEOPLE TO WORK.\nACCORDING TO PRESIDENT JOHNSON'S AIDES, THE PRESIDENT\nBELIEVES THE BEST POLITICS IS THE BEST ECONOMICS. I BELIEVE\nJUST AS FIRMLY THAT THE BEST ECONOMICS IS THE BEST POLITICS.\nI WANT FEDERAL SPENDING REDUCED FOR EXACTLY THAT REASON\n--BECAUSE IT'S THE BEST ECONOMICS. GOVERNMENT DOESN'T\nPRODUCE ANYTHING BUT SERVICES. AND IT CAN'T GIVE YOU\nANYTHING IT DOESN'T TAKE FROM YOU IN THE FIRST PLACE.\nagreement big enough the\nWHEN GOVERNMENT TAKES TOO MUCH FROM THE PRIVATE SECTOR\nOF THE ECONOMY, GOVERNMENT JOB-TRAINING AND ANTI-POVERTY\nPROGRAMS ARE OF NO AVAIL. THE BEST ANSWER TO POVERTY IS\nA GOOD PAYING JOB, AND THE BEST WAY TO CREATE JOBS IS\nGERALD LIBRARY GERALDR. FORD\nTO ENCOURAGE SOUND GROWTH IN THE ECONOMY. LET'S HELP\n-18-\nOUR GREAT PRIVATE ENTERPRISE SYSTEM LICK POVERTY BY\nCREATING JOBS AND TRAINING THE MEN TO FILL THEM.\nTO RELY TOO HEAVILY ON GOVERNMENT IS TO INVITE\nDESTRUCTION OF THAT SPIRIT IN AMERICANS WHICH PRODUCED\nTHE GREATEST DEMOCRACY ON EARTH, IMPERFECT AS IT IS. IT\nBRINGS ON WHAT I CALL THE DISINCENTIVE SICKNESS.\nIT WAS GEORGE WASHINGTON, WHOSE BIRTHDAY WE CELEBRATE\nTODAY, WHO SAID: \"GOVERNMENT IS LIKE A FIRE WHICH, IF\nIT IS PROPERLY CONTROLLED, WILL LIGHT YOUR HOMES AND COOK\nYOUR FOOD AND RUN YOUR FACTORIES BUT, IF IT IS NOT CONTROLLED\nIT WILL DESTROY YOU.\"\nPRESIDENT WOODROW WILSON, A DEMOCRAT, TOLD THE AMERICAN\nPEOPLE: \"LIBERTY CANNOT EXIST WHERE GOVERNMENT TAKES CARE\nOF THE PEOPLE, BUT IT CAN ONLY THRIVE WHERE THE PEOPLE\nLIBRARY\n-19-\nTAKE CARE OF THE GOVERNMENT.\"\nI URGE YOU, EVERY ONE OF YOU, TO DO YOUR UTMOST TO\nFEED THE FIRE OF LIBERTY--TO MAKE SURE THAT GOVERNMENT\nIN AMERICA WILL BE THE SERVANT AND NOT THE MASTER OF THE\nPEOPLE.\nTHANK YOU.\n----\n---END---\nFORD LIBRANA\nTEXT\nNEWARK, N.J. FEB. 22, 1967\nHOUSE OFFICE OF OF REPRESENTATIVES, THE MINORITY LEADER U.S. BUILDING CONTRACTORS Herald R. Ford\nPUBLIC DOCUMENT\nM.C.\nOFFICIAL BUSINESS\nWED., FEB. 22, 1967\nREADING Copy\nN.J. BUILDING CONTRACTORS ASSN.\nNEWARK, N.J.\nFORD LIBRAR 07%\n1\n76°\n3-3-2\nill 1951 Mr\n6/2/ 560 \"THO 4-5 5-7\nthey\nA\nJohn\nNNI\n1954 1956\nA\nI\n53\n1956 1960\n1969\n1962\n6ˢᵗ\n80\n1965\n3\n!:\n*\nFoRD\n©\nFORD 3 LIBRARY 077578\nFOR RELEASE AT 6:30 PsMo, WEDNESDAY, FEBRUARY 22, 1967\nADDRESS BY REP. GERALD R. FORD, R-MICH.\nBEFORE THE NEW JERSEY BUILDING CONTRACTORS ASSN. NEWARK, NEW JERSEY.\nTonight I am inviting you to tour with me the puzzling city of Washington, D.C.\nI call it the puzzling city not merely because the Frenchman who laid out its\nstreet pattern had 'a thing' about traffic circles, with streets fanning out like\nspokes from the hub of a wheel.\nWashington is a puzzling city because it is a city of gaps, a city where the\ngap between dreams and reality is most acute, a city where the gap between rhetoric\nand reality often is most painful, a city where illusion often passes for truth.\nAt no time has the city of Washington been more puzzling than during the past\nthree years, and at present.\nIt has been so puzzling that even the most casual observer of current events\nis familiar with the term, Credibility Gap. Most Americans associate that term\nwith the equally popular expression. \"Would you believe?\" And their answer is \"no.\"\nWith the publicity generated by the Adam Clayton Powell, Thomas Dodd, and Bobby\nBaker cases, the American public also is beginning to see an Integrity Gap in\nWashington. Unfortunately, they tead to tar all members Congress with the same\nbrush. This is tragic because I firmly believe the overwhelming majority of members\nof the Congress--Democrats and Republicans --are honest, hardworking and able public\nofficials.\nWhat all of this adds up to is that it's cleanup time in Washington. It's not\nfixit time; it's fixup time. We have to clean house--and the sooner the better.\nI'm not just talking about abuses of the public trust; I'm talking about\nabuses of the public purse.\nI'm not just talking about airplane trips on private business at taxpayer\nexpense; I'm talking about foolish funding, silly spending of taxpayer money in\nthe name of the public interest.\nI'm talking about millions of dollars spent on social experimentation while\nthere's a war on. I'm talking about millions of dollars spent on beautifying\nAmerica while the number of GI's killed or wounded passes the 50,000 mark in a\nwar costing us nearly $2 billion a month.\nLet me give you a couple of examples.\nI heard the other day about a half-million-dollar Health-Education-Welfare\nDepartment project to develop a dance and theater curriculum. So I checked into it.\n(MORE)\nGERALD FORD LIBRARY\n-2-\nA U.S. Office of Education official told me the $500,000 is being spent this fiscal\nyear under Titles 3 and 4 of the Elementary-Secondary Education Act. That's federal\naid to elementary schools and high schools.\nThe money has been used to establish laboratory theaters in Providence, R.I.,\nand New Orleans, La. The idea is to find out how we might be able to use the arts\nto teach youngsters who can't learn from books.\nAs the Office of Education official explained it, \"We're trying to see what\nthe arts can do to meet national needs.\"\nCan you see spending half a million dollars in educational theater workshops\nwhile there's a war on? I can't, however bftily it is described.\nIt doesn't make sense when we should be setting priorities and cutting out\nall but the most essential domestic spending.\nI learned, too, about another project that should be most helpful to this\nnation in meeting its national needs. The Housing and Urban Development Department\nhas just approved a $452,375 grant to the District of Columbia for a number of\nbeautification projects. Including this $452,000 grant, the D.C. Government plans\nto spend more than $2 million on beautification this fiscal year.\nIdeally, beauty should be present in everyone's life. Ideally, the city of\nWashington should be the most beautiful city in the world. But does it make sense\nto drop a $452,000 beautification grant into the lap of D. C. officials when we're\nfighting a costly war halfway around the world? I think not.\nThink about these two examples of Johnson Administration spending and then\ntell me whether the President has been blocking unnecessary expenditures, as he\nlikes to pretend.\nConsider these two items and tell me whether you think Congress should give\nthe President his income tax increase or cut his fiscal 1968 budget. You and I\nboth know there are many more items like these two scattered throughout the mammoth\ndocument that passes for a guide to reasonable federal spending.\nThe President's $135 billion fiscal 1968 budget not only is fat,----bet it has\nplenty of fat in it. We in the Congress who care about the taxpayer intend to cut\nout as much of it as we can. We know we can do it without cutting necessary services.\nWe know the people want it done.\nIs this a negative attitude? Is it negative to want to streamline the federal\ngovernment, set priorities and spend the taxpayer's dollars prudently? I contend\n(MORE)\n-3-\nthat is being positive--and in the best possible way. Those who raise their hands\nin horror over any attempts at budget-cutting should be consigned to Credibility\nGap, or better yet let's drop them into Credibility Canyon.\nThe Credibility Gap has widened into a canyon, you know, and for good reason.\nA short time ago Defense Department officials admitted that our plane losses\nin Vietnam are actually double what they had been reporting----because they had\nbeen giving out figures only on those planes lost in air action and ignoring as far\nas the public was concerned, those destroyed other than in combat. There's\naccuracy for you;there's truth-in-reporting for you!\nThe Credibility Gap not only extends to the budget; it's there that it is the\nwidest.\nTake the President's budget for the current fiscal year, for instance. When\nthe President submitted it to Congress he said we'd have a $1.8 billion deficit.\nRepublicans said the figure was a phoney. The Administration cried, \"Politics.\"\nNowthe President tells us the 1967 deficit will be more than $9 billion. This error\nresulted from a miscalculation of $14 billion in expenditures, and this gross\nunderestimate of expenditures was not all related to increased costs in Vietnam.\nAll last year Republicans said the administration was handing out fake\nfigures on the cost of the Vietnam War. Civilian spokesmen for the Pentagon snorted,\n\"Politics.\" Now Defense Secretary McNamara admits he underestimated the cost of\nthe war by $10 billion.\nAt the same time that Administration officials were refusing to make known\nthe true cost of the Vietnam War, they were ramming through Congress such new\nprograms as Rent Subsidies, the Teacher Corps and many other Great Society fringe\nbenefits.\nAll this time prices were moving up and the price stability that had meant\nreal economic gains for millions of Americans was being destroyed.\nPresident Johnson rejected the recommendation of his top economic adviser,\nGardner Ackley, that he ask Congress to vote an income tax increase. In the\nalternative, he also rejected all Republican pleas that he make deep cuts in\ndomestic spending as offsets to Vietnam War costs.\nThe result was that our overheated economy rolled blindly on, stimulated by\nheavy Great Society spending and slowed down only slightly by such devices as\naccelerated collection of income taxes and restoration of part of the excise taxes\nrepealed in 1965.\nOf course, we had to increase the National Debt Limit from $330 billion to\n$336 billion recently. And Congress will be asked to raise the debt limit again\n(MORE)\n-4-\nin June by about $10 billion more. Is this only because of the Vietnam War? Not\nat all! We can also thank unprecedented domestic spending to expand the so-called\nGreat Society and tackle more costly social experiments.\nIs this truly the way to fashion a Great Society in America? To ladle out\nmillions of taxpayer dollars for countless experiments of dubious value while over\n400,000 American military personnel committed to Vietnam by the Commander in Chief\nare engaged in the third largest war in our history?\nWe want progess in this country, but this isn't the way to get it. The\napproach is wrong. It's wrong because it's based on the assumption that all you\nhave to do is throw enough federal dollars at a problem and it will go away. It's\nwrong because it's based on the premise that only Washington has the answers.\nWe would come up with more of the answers and we would move faster and farther\nif we had confidence in our state and local governments and in private enterprise.\nIt is a mistake to look everlastingly to the federal government.\nI have called Washington a puzzling city. Let me tell you it is especially\npuzzling to the city officials who try to find their way through the maze of\nfederal bureaus to track down a federal grant for a local project.\nThe traditional federal grant-in-aid system is wasteful. It is wasteful of\ntime, money and human resources. And it makes our state and city governments mere\nappendages of Washington, juggled by strings pulled in the Nation's capital.\nI predict that Congress in time will adopt a federal tax-sharing system which\nultimately will replace the bogged-down bureaucratic grant-in-aid system and lay\ndown a challenge to our state and local governments to do a job in solving their\nproblems.\nAs federal grant programs expand and increase in number, the federal tax load\ngrows greater and the red ink rises higher.\nWe should be managing our national affairs in such a way that income taxes\ncould be reduced. Tax reduction should be our goal. Instead we have the President\nasking for an increase in income taxes to pay for increased domestic spending. It\nwould make far more sense to cut domestic spending by an equivalent amount.\nNow we have Mr. Ackley, chairman of the President's Council of Economic\nAdvisers, attempting to blackmail Congress into approving the President's proposal\nfor a 6 percent surtax. If the tax increase is not approved, Mr. Ackley said the\nother day, \"we might face the danger of a return to the inflationary dangers and\nhigh interest rates of last year.\"\n(MORE)\n-5-\nMy answer to that is that the tax increase will not prevent the unions from\nseeking wage increases of 5 percent or more this year. The outlook is for consid-\nerable cost-push inflation due to wage increases regardless of what we do on taxes.\nAs for high interest rates, the Administration could help that situation by getting\nout of the short-term money market for as long as possible.\nYou and I know it was tight money and high interest rates that produced a\nvirtual depression in the home building industry last year. You and I know the\nAdministration moved to suspend the 7 percent tax credit for investment in new\nplant and buildings because that was one way to attack inflation without getting\nanybody but business mad.\nTight money? High interest rates? The hard facts are that government spending\nhas been and continues to be a major reason for the record demand for money and for\nthe inflationary pressures that plague our economy. And this is not just because\nof the Vietnam War. The record shows that nondefense spending has been rising\nnearly as much.\nWe should be promoting growth in the economy--healthy growth. To do that we\nmust achieve a balanced fiscal and monetary policy. As a first step toward fiscal\nbalance, we must put a hold on all new federal programs until current inflationary\npressures ease off.\nIt is a seeming paradox, but we are encountering recession dangers even while\ninflationary pressures continue. This is because the Administration has done such\na poor job of managing the economy ever since the massive tax cuts of 1964 and\n1965 touched off strong economic growth. There is drag and sag in the economy right\nnow.\nWe need sound new economic growth. I don't think a federal income tax increase\nat mid-year is the way to encourage it. What we need is a holddown on federal\nspending as a counter to inflation and high interest rates--and restoration of\nthe investment tax credit to spur capital investment, generate new business con-\nfidence and put more people to work.\nAccording to President Johnson's aides, the President believes the best\npolitics is the best economics. I believe just as firmly that the best economics\nis the best politics.\nI want federal spending reduced for exactly that reason--because it's the best\neconomics. Government doesn't produce anything but services. And it can't give\nyou anything it doesn't take from you in the first place.\n(MORE)\n-6-\nWhen government takes too much from the private sector of the economy,\ngovernment job-training and anti-poverty programs are of no avail. The best\nanswer to poverty is a good-paying job, and the best way to create jobs is to\nencourage sound growth in the economy. Let's help our great private enterprise\nsystem lick poverty by creating jobs and training the men to fill them.\nTo rely too heavily on government is to invite destruction of that spirit in\nAmericans which produced the greatest democracy on earth, imperfect as it is. It\nbrings on what I call the disincentive sickness.\nIt was George Washington, whose birthday we celebrate today, who said:\n\"Government is like a fire which, if it is properly controlled, will light your\nhomes and cook your food and run your factories but, if it is not controlled, it\nwill destroy you.\"\nPresident Woodrow Wilson, a Democrat, told the American people: \"Liberty\ncannot exist where government takes care of the people, but it can only thrive\nwhere the people take care of the government.\"\nI urge you, every one of you, to do your utmost to feed the fire of liberty--\nto make sure that government in America will be the servant and not the master of\nthe people. Thank you.\n# # #\nFOR RELEASE AT 6:30 PAMA, WEDNESDAY, FEBRUARY 22, 1967\nADDRESS BY REP. GERALD R. FORD, R-MICH.\nBEFORE THE NEW JERSEY BUILDING CONTRACTORS ASSN. NEWARK, NEW JERSEY.\nTonight I am inviting you to tour with me the puzzling city of Washington, D.C.\nI call it the puzzling city not merely because the Frenchman who laid out its\nstreet pattern had 'a thing' about traffic circles, with streets fanning out like\nspokes from the hub of a wheel.\nWashington is a puzzling city because it is a city of gaps, a city where the\ngap between dreams and reality is most acute, a city where the gap between rhetoric\nand reality often is most painful, a city where illusion often passes for truth.\nAt no time has the city of Washington been more puzzling than during the past\nthree years, and at present.\nIt has been so puzzling that even the most casual observer of current events\nis familiar with the term, Credibility Gap. Most Americans associate that term\nwith the equally popular expression \"Would you believe?\" And their answer is \"no.\"\nWith the publicity generated by the Adam Clayton Powell, Thomas Dodd, and Bobby\nBaker cases, the American public also is beginning to see an Integrity Gap in\nWashington. Unfortunately, they tend to tar all members of Congress with the same\nbrush. This is tragic because I firmly believe the overwhelming majority of members\nof the Congress--Democrats and Republicans --are honest, hardworking and able public\nofficials.\nWhat all of this adds up to is that it's cleanup time in Washington. It's not\nfixit time; it's fixup time. We have to clean house--and the sooner the better.\nI'm not just talking about abuses of the public trust; I'm talking about\nabuses of the public purse.\nI'm not just talking about airplane trips on private business at taxpayer\nexpense; I'm talking about foolish funding, silly spending of taxpayer money in\nthe name of the public interest.\nI'm talking about millions of dollars spent on social experimentation while\nthere's a war on. I'm talking about millions of dollars spent on beautifying\nAmerica while the number of GI's killed or wounded passes the 50,000 mark in a\nwar costing us nearly $2 billion a month.\nLet me give you a couple of examples.\nI heard the other day about a half-million-dollar Health-Education-Welfare\nDepartment project to develop a dance and theater curriculum. So I checked into it.\n(MORE)\n-2-\nA U.S. Office of Education official told me the $500,000 is being spent this fiscal\nyear under Titles 3 and 4 of the Elementary-Secondary Education Act. That's federal\naid to elementary schools and high schools.\nThe money has been used to establish laboratory theaters in Providence, R.I.,\nand New Orleans, La. The idea is to find out how we might be able to use the arts\nto teach youngsters who can't learn from books.\nAs the Office of Education official explained it, \"We're trying to see what\nthe arts can do to meet national needs.\"\nCan you see spending half a million dollars in educational theater workshops\nwhile there's a war on? I can't, however bftily it is described.\nIt doesn't make sense when we should be setting priorities and cutting out\nall but the most essential domestic spending.\nI learned, too, about another project that should be most helpful to this\nnation in meeting its national needs. The Housing and Urban Development Department\nhas just approved a $452,375 grant to the District of Columbia for a number of\nbeautification projects. Including this $452,000 grant, the D.C. Government plans\nto spend more than $2 million on beautification this fiscal year.\nIdeally, beauty should be present in everyone's life. Ideally, the city of\nWashington should be the most beautiful city in the world. But does it make sense\nto drop a $452,000 beautification grant into the lap of D. C. officials when we're\nfighting a costly war halfway around the world? I think not.\nThink about these two examples of Johnson Administration spending and then\ntell me whether the President has been blocking unnecessary expenditures, as he\nlikes to pretend.\nConsider these two items and tell me whether you think Congress should give\nthe President his income tax increase or cut his fiscal 1968 budget. You and I\nboth know there are many more items like these two scattered throughout the mammoth\ndocument that passes for a guide to reasonable federal spending.\nThe President's $135 billion fiscal 1968 budget not only is fat,----but it has\nplenty of fat in it. We in the Congress who care about the taxpayer intend to cut\nout as much of it as we can. We know we can do it without cutting necessary services.\nWe know the people want it done.\nIs this a negative attitude? Is it negative to want to streamline the federal\ngovernment, set priorities and spend the taxpayer's dollars prudently? I contend\n(MORE)\n-3-\nthat is being positive--and in the best possible way. Those who raise their hands\nin horror over any attempts at budget-cutting should be consigned to Credibility\nGap, or better yet let's drop them into Credibility Canyon.\nThe Credibility Gap has widened into a canyon, you know, and for good reason.\nA short time ago Defense Department officials admitted that our plane losses\nin Vietnam are actually double what they had been reporting----because they had\nbeen giving out figures only on those planes lost in air action and ignoring as far\nas the public was concerned, those destroyed other than in combat. There's\naccuracy for you;there's truth-in-reporting for you!\nThe Credibility Gap not only extends to the budget; it's there that it is the\nwidest.\nTake the President's budget for the current fiscal year, for instance. When\nthe President submitted it to Congress he said we'd have a $1.8 billion deficit.\nRepublicans said the figure was a phoney. The Administration cried, \"Politics.\"\nNow the President tells us the 1967 deficit will be more than $9 billion. This error\nresulted from a miscalculation of $14 billion in expenditures, and this gross\nunderestimate of expenditures was not all related to increased costs in Vietnam.\nAll last year Republicans said the administration was handing out fake\nfigures on the cost of the Vietnam War. Civilian spokesmen for the Pentagon snorted,\n\"Politics.\" Now Defense Secretary McNamara admits he underestimated the cost of\nthe war by $10 billion.\nAt the same time that Administration officials were refusing to make known\nthe true cost of the Vietnam War, they were ramming through Congress such new\nprograms as Rent Subsidies, the Teacher Corps and many other Great Society fringe\nbenefits.\nAll this time prices were moving up and the price stability that had meant\nreal economic gains for millions of Americans was being destroyed.\nPresident Johnson rejected the recommendation of his top economic adviser,\nGardner Ackley, that he ask Congress to vote an income tax increase. In the\nalternative, he also rejected all Republican pleas that he make deep cuts in\ndomestic spending as offsets to Vietnam War costs.\nThe result was that our overheated economy rolled blindly on, stimulated by\nheavy Great Society spending and slowed down only slightly by such devices as\naccelerated collection of income taxes and restoration of part of the excise taxes\nrepealed in 1965.\nOf course, we had to increase the National Debt Limit from $330 billion to\n$336 billion recently. And Congress will be asked to raise the debt limit again\n(MORE)\n-4-\nin June by about $10 billion more. Is this only because of the Vietnam War? Not\nat all! We can also thank unprecedented domestic spending to expand the so-called\nGreat Society and tackle more costly social experiments.\nIs this truly the way to fashion a Great Society in America? To ladle out\nmillions of taxpayer dollars for countless experiments of dubious value while over\n400,000 American military personnel committed to Vietnam by the Commander in Chief\nare engaged in the third largest war in our history?\nWe want progess in this country, but this isn't the way to get it. The\napproach is wrong. It's wrong because it's based on the assumption that all you\nhave to do is throw enough federal dollars at a problem and it will go away. It's\nwrong because it's based on the premise that only Washington has the answers.\nWe would come up with more of the answers and we would move faster and farther\nif we had confidence in our state and local governments and in private enterprise.\nIt is a mistake to look everlastingly to the federal government.\nI have called Washington a puzzling city. Let me tell you it is especially\npuzzling to the city officials who try to find their way through the maze of\nfederal bureaus to track down a federal grant for a local project.\nThe traditional federal grant-in-aid system is wasteful. It is wasteful of\ntime, money and human resources. And it makes our state and city governments mere\nappendages of Washington, juggled by strings pulled in the Nation's capital.\nI predict that Congress in time will adopt a federal tax-sharing system which\nultimately will replace the bogged-down bureaucratic grant-in-aid system and lay\ndown a challenge to our state and local governments to do a job in solving their\nproblems.\nAs federal grant programs expand and increase in number, the federal tax load\ngrows greater and the red ink rises higher.\nWe should be managing our national affairs in such a way that income taxes\ncould be reduced. Tax reduction should be our goal. Instead we have the President\nasking for an increase in income taxes to pay for increased domestic spending. It\nwould make far more sense to cut domestic spending by an equivalent amount.\nNow we have Mr. Ackley, chairman of the President's Council of Economic\nAdvisers, attempting to blackmail Congress into approving the President's proposal\nfor a 6 percent surtax. If the tax increase is not approved, Mr. Ackley said the\nother day, \"we might face the danger of a return to the inflationary dangers and\nhigh interest rates of last year.\"\n(MORE)\n-5-\nMy answer to that is that the tax increase will not prevent the unions from\nseeking wage increases of 5 percent or more this year. The outlook is for consid-\nerable cost-push inflation due to wage increases regardless of what we do on taxes.\nAs for high interest rates, the Administration could help that situation by getting\nout of the short-term money market for as long as possible.\nYou and I know it was tight money and high interest rates that produced a\nvirtual depression in the home building industry last year. You and I know the\nAdministration moved to suspend the 7 percent tax credit for investment in new\nplant and buildings because that was one way to attack inflation without getting\nanybody but business mad.\nTight money? High interest rates? The hard facts are that government spending\nhas been and continues to be a major reason for the record demand for money and for\nthe inflationary pressures that plague our economy. And this is not just because\nof the Vietnam War. The record shows that nondefense spending has been rising\nnearly as much.\nWe should be promoting growth in the economy--healthy growth. To do that we\nmust achieve a balanced fiscal and monetary policy. As a first step toward fiscal\nbalance, we must put a hold on all new federal programs until current inflationary\npressures ease off.\nIt is a seeming paradox, but we are encountering recession dangers even while\ninflationary pressures continue. This is because the Administration has done such\na poor job of managing the economy ever since the massive tax cuts of 1964 and\n1965 touched off strong economic growth. There is drag and sag in the economy right\nnow.\nWe need sound new economic growth. I don't think a federal income tax increase\nat mid-year is the way to encourage it. What we need is a holddown on federal\nspending as a counter to inflation and high interest rates--and restoration of\nthe investment tax credit to spur capital investment, generate new business con-\nfidence and put more people to work.\nAccording to President Johnson's aides, the President believes the best\npolitics is the best economics. I believe just as firmly that the best economics\nis the best politics.\nI want federal spending reduced for exactly that reason--because it's the best\neconomics. Government doesn't produce anything but services. And it can't give\nyou anything it doesn't take from you in the first place.\n(MORE)\n-6-\nWhen government takes too much from the private sector of the economy,\ngovernment job-training and anti-poverty programs are of no avail. The best\nanswer to poverty is a good-paying job, and the best way to create jobs is to\nencourage sound growth in the economy. Let's help our great private enterprise\nsystem lick poverty by creating jobs and training the men to fill them.\nTo rely too heavily on government is to invite destruction of that spirit in\nAmericans which produced the greatest democracy on earth, imperfect as it is. It\nbrings on what I call the disincentive sickness.\nIt was George Washington, whose birthday we celebrate today, who said:\n\"Government is like a fire which, if it is properly controlled, will light your\nhomes and cook your food and run your factories but, if it is not controlled, it\nwill destroy you.\"\nPresident Woodrow Wilson, a Democrat, told the American people: \"Liberty\ncannot exist where government takes care of the people, but it can only thrive\nwhere the people take care of the government.\"\nI urge you, every one of you, to do your utmost to feed the fire of liberty--\nto make sure that government in America will be the servant and not the master of\nthe people. Thank you.\n# # #\nSpeech the Week-\nPUBLIC RELATIONS OFFICE\nREPUBLICAN CONGRESSIONAL COMMITTEE\n312 CONGRESSIONAL HOTEL\nWASHINGTON, D. C.\nSUBJECT: Washington--World's Most Puzzling City\nRemarks of House Republican Leader Gerald R. Ford\nBefore the New Jersey Building Contractors Association\nNewark, N.J., February 22, 1967\nTONIGHT, I AM inviting you to tour with me the puzzling city of Washington, D.C.\nI call it the puzzling city not merely because the Frenchman who laid out its street\npattern had 'a thing' about traffic circles, with streets fanning out like spokes from the hub of\na wheel.\nWashington is a puzzling city because it is a city of gaps, a city where the gap be-\ntween dreams and reality is most acute, a city where the gap between rhetoric and reality often\nis most painful, a city where illusion often passes for truth.\nAt no time has the city of Washington been more puzzling than during the past three\nyears, and at present.\nIt has been so puzzling that even the most casual observer of current events is familiar\nwith the term, Credibility Gap. Most Americans associate that term with the equally popular\nexpression, \"Would you believe?\" And their answer is \"no.\"\nWith the publicity generated by the Adam Clayton Powell, Thomas Dodd, and Bobby\nBaker cases, the American public also is beginning to see an Integrity Gap in Washington. Un-\nfortunately, they tend to tar all members of Congress with the same brush. This is tragic be-\ncause I firmly believe the overwhelming majority of members of the Congress-Democrats and\nRepublicans--are honest, hardworking and able public officials.\nWHAT ALL OF THIS adds up to is that it's cleanup time in Washington. It's not\nfixit time; it's fixup time. We have to clean house--and the sooner the better.\nI'm not just talking about abuses of the public trust; I'm talking about abuses of the\npublic purse.\nI'm not just talking about airplane trips on private business at taxpayer expense; I'm\ntalking about foolish funding, silly spending of taxpayer money in the name of the public inter-\nest.\nI'm talking about millions of dollars spent on social experimentation while there's a\nwar on. I'm talking about millions of dollars spent on beautifying America while the number of\nGI's killed or wounded passes the 50,000 mark in a war costing US nearly $2 billion a month.\nLet me give you a couple of examples.\nI heard the other day about a half-million-dollar Health-Education-Welfare Depart-\nment project to develop a dance and theater curriculum. So I checked into it. A U.S. Office\nof Education official told me the $500,000 is being spent this fiscal year under Titles 3 and 4\nof the Elemantary-Secondary Education Act. That's Federal aid to elementary schools and\nhigh schools.\n- more -\n- 2 -\nTHE MONEY HAS BEEN USED to establish laboratory theaters in Providence, R. 1.,\nand New Orleans, La. The idea is to find out how we might be able to use the arts to teach\nyoungsters who can't learn from books.\nAs the Office of Education official explained it, \"We're trying to see what the arts\ncan do to meet national needs.\"\nCan you see spending half a million dollars in educational theater workshops while\nthere's a war on? I can't, however loftily it is described.\nIt doesn't make sense when we should be setting priorities and cutting out all but\nthe most essential domestic spending.\nI learned, too, about another project that should be most helpful to this nation in\nmeeting its national needs. The Housing and Urban Development Department has just approved\na $452,375 grant to the District of Columbia for a number of beautification projects. Including\nthis $452,000 grant, the D.C. Government plans to spend more than $2 million on beautification\nthis fiscal year.\nIdeally, beauty should be present in everyone's life. Ideally, the city of Washing-\nton should be the most beautiful city in the world. But does it make sense to drop a $452,000\nbeautification grant into the lap of D.C. officials when we're fighting a costly war halfway\naround the world? I think not.\nTHINK ABOUT THESE TWO examples of Johnson Administration spending and then\ntell me whether the President has been blocking unnecessary expenditures, as he likes to pretend.\nConsider these two items and tell me whether you think Congress should give the\nPresident his income tax increase or cut his fiscal 1968 budget. You and I both know there are\nmany more items like these two scattered throughout the mammoth document that passes for a\nguide to reasonable Federal spending.\nThe President's $135 billion fiscal 1968 budget not only is fat--but it has plenty of\nfat in it. We in the Congress who care about the taxpayer intend to cut out as much of it as\nwe can. We know we can do it without cutting necessary services. We know the people want\nit done.\nIs this a negative attitude? Is it negative to want to streamline the Federal Govern-\nment, set priorities and spend the taxpayer's dollars prudently? I contend that is being posi-\ntive--and in the best possible way. Those who raise their hands in horror over any attempts at\nbudget-cutting should be consigned to Credibility Gap, or better yet let's drop them into\nCredibility Canyon.\nThe Credibility Gap has widened into a canyon, you know, and for good reason.\nA SHORT TIME AGO Defense Department officials admitted that our plane losses\nin Vietnam are actually double what they had been reporting--because they had been giving\nout figures only on those planes lost in air action and ignoring as far as the public was con-\ncerned, those destroyed other than in combat. There's accuracy for you; there's truth-in-re-\nporting for you!\nThe Credibility Gap not only extends to the budget; it's there that it is the widest.\nTake the President's budget for the current fiscal year, for instance. When the\nPresident submitted it to Congress he said we'd have a $1.8 billion deficit. Republicans said\nthe figure was a phoney. The Administration cried, \"Politics.\" Now the President tells US\nthe 1967 deficit will be more than $9 billion. This error resulted from a miscalculation of $14\nbillion in expenditures, and this gross underestimate of expenditures was not all related to in-\ncreased costs in Vietnam.\n- more -\n- 3 -\nAll last year Republicans said the Administration was handing out fake figures on the\ncost of the Vietnam War. Civilian spokesmen for the Pentagon snorted, \"Politics.\" Now De-\nfense Secretary McNamara admits he underestimated the cost of the war by $10 billion.\nAt the same time that Administration officials were refusing to make known the true\ncost of the Vietnam War, they were ramming through Congress such new programs as Rent Sub-\nsidies, the Teacher Corps and many other Great Society fringe benefits.\nALL THIS TIME prices were moving up and the price stability that had meant real\neconomic gains for millions of Americans was being destroyed.\nPresident Johnson rejected the recommendation of his top economic adviser, Gardner\nAckley, that he ask Congress to vote an income tax increase. In the alternative, he also re-\njected all Republican pleas that he make deep cuts in domestic spending as offsets to Vietnam\nWar costs.\nThe result was that our overheated economy rolled blindly on, stimulated by heavy\nGreat Society spending and slowed down only slightly by such devices as accelerated collection\nof income taxes and restoration of part of the excise taxes repealed in 1965.\nOf course, we had to increase the National Debt Limit from $330 billion to $336\nbillion recently. And Congress will be asked to raise the debt limit again in June by about $10\nbillion more. Is this only because of the Vietnam War? Not at alll We can also thank un-\nprecedented domestic spending to expand the so-called Great Society and tackle more costly\nsocial experiments.\nIs this truly the way to fashion a Great Society in America? To ladle out millions\nof taxpayer dollars for countless experiments of dubious value while over 400,000 American\nmilitary personnel committed to Vietnam by the Commander in Chief are engaged in the third\nlargest war in our history?\nWE WANT PROGRESS in this country, but this isn't the way to get it. The approach\nis wrong. It's wrong because it's based on the assumption that all you have to do is throw enough\nFederal dollars at a problem and it will go away. It's wrong because it's based on the premise\nthat only Washington has the answers.\nWe would come up with more of the answers and we would move faster and farther\nif we had confidence in our State and local governments and in private enterprise. If is a\nmistake to look everlastingly to the Federal government.\nI have called Washington a puzzling city. Let me tell you it is especially puzzling\nto the city officials who try to find their way through the maze of Federal bureaus to track down\na Federal grant for a local project.\nThe traditional Federal grant-in-aid system is wasteful. It is wasteful of time, money\nand human resources. And it makes our State and city governments mere appendages of Wash-\nington, juggled by strings pulled in the Nation's capital.\nI predict that Congress in time will adopt a Federal tax-sharing system which ultimate-\nly will replace the bogged-down bureaucratic grant-in-aid system and lay down a challenge to\nour State and local governments to do a job in solving their problems.\nAS FEDERAL GRANT programs expand and increase in number, the Federal tax load\ngrows greater and the red ink rises higher.\nWe should be managing our national affairs in such a way that income taxes could\nbe reduced. Tax reduction should be our goal. Instead we have the President asking for an\nincrease in income taxes to pay for increased domestic spending. It would make far more sense\nto cut domestic spending by an equivalent amount.\n- more -\n- 4 -\nNow we have Mr. Ackley, chairman of the President's Council of Economic Advisers,\nattempting to blackmail Congress into approving the President's proposal for C 6 percent sur-\ntax. If the tax increase is not approved, Mr. Ackley said the other day, \"we might face the\ndanger of a return to the inflationary dangers and high interest rates of last year.\"\nMy answer to that is that the tax increase will not prevent the unions from seeking\nwage increases of 5 percent or more this year. The outlook is for considerable cost-push in-\nflation due to wage increases regardless of what we do on taxes. As for high interest rates,\nthe Administration could help that situation by getting out of the short-term money market\nfor as long as possible.\nYou and I know it was tight money and high interest rates that produced G virtual\ndepression in the home building industry last year. You and I know the Administration moved\nto suspend the 7 percent tax credit for investment in new plant and buildings because that was\none way to attack inflation without getting anybody but business mad.\nTIGHT MONEY? High interest rates? The hard facts are that government spend-\ning has been and continues to be a major reason for the record demand for money and for the\ninflationary pressures that plague our economy. And this is not just because of the Vietnam\nWar. The record shows that nondefense spending has been rising nearly as much.\nWe should be promoting growth in the economy-healthy growth. To do that we\nmust achieve a balanced fiscal and monetary policy. As a first step toward fiscal balance,\nwe must put a hold on all new Federal programs until current inflationary pressures ease off.\nIt is a seeming paradox, but we are encountering recession dangers even while in-\nflationary pressures continue. This is because the Administration has done such a poor job of\nmanaging the economy ever since the massive tax cuts of 1964 and 1965 touched off strong\neconomic growth. There is drag and sag in the economy right now.\nWe need sound new economic growth. I don't think a Federal income tax increase\nof mid-year is the way to encourage it. What we need is a holddown on Federal spending as\nC counter to inflation and high interest rates--and restoration of the investment tax credit to\nspur capital investment, generate new business confidence and put more people to work.\nAccording to President Johnson's aides, the President believes the best politics\nis the best economics. i believe just as firmly that the best economics is the best politics.\nI WANT FEDERAL SPENDING reduced for exactly that reason--because it's the\nbest economics. Government doesn't produce anything but services. And it can't give you\nanything it doesn't take from you in the first place.\nWhen government takes too much from the private sector of the economy, govern-\nment job-training and anti-poverty programs are of no avail. The best answer to poverty is a\ngood-paying job, and the best way to create jobs is to encourage sound growth in the economy.\nLet's help our great private enterprise system lick poverty by creating jobs and training the\nmen to fill them.\nTo rely too heavily on government is to invite destruction of that spirit in Americans\nwhich produced the greatest democracy on earth, imperfect as it is. It brings on what I call\nthe disincentive sickness.\nIf was George Washington who said: \"Government is like a fire which, if it is\nproperly controlled, will light your homes and cook your food and run your factories but, if it\nis not controlled, it will destroy you.\"\nPresident Woodrow Wilson, a Democrat, told the American people: \"Liberty cannot\nexist where government takes care of the people, but it can only thrive where the people take\ncare of the government.\"\nI urge you, every one of you, to do your utmost to feed the fire of liberty--to\nmake sure that government in America will be the servant and not the master of the people.\n# # #"
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